Commentary Magazine


Topic: model for economic revival

Another Summit

The “jobs summit” today typifies the root of the Obama team’s misguided thinking on jobs. In place of policies that would aid in private-sector job creation, the administration has provided an oversold and ineffective stimulus plan, lots of dog-and-pony shows, much heated rhetoric about Wall Street excesses, and a grab bag of policies that makes things worse. For starters, the looming debt, as Robert Samuelson explains, has created ”the perception that the administration will tolerate, despite rhetoric to the contrary, permanently large deficits [that] could ultimately rattle investors and lead to large, self-defeating increases in interest rates. There are risks in overaggressive government job-creation programs that can be sustained only by borrowing or taxes.” But that’s not all, as Samuelson observes:

Obama can’t be fairly blamed for most job losses, which stemmed from a crisis predating his election. But he has made a bad situation somewhat worse. His unwillingness to advance trade agreements (notably, with Colombia and South Korea) has hurt exports. The hostility to oil and gas drilling penalizes one source of domestic investment spending. More important, the decision to press controversial proposals (health care, climate change) was bound to increase uncertainty and undermine confidence. Some firms are postponing spending projects “until there is more clarity,” [Moody's Economy.com Mark] Zandi notes. Others are put off by anti-business rhetoric.

The jobs summit ignores all that and offers up yet another campaign-type event in lieu of productive governance. This is at the heart of not only the jobs problem but also much of what ails the administration. Rather than a useless summit, the administration would do well to consider a package of tax cuts designed to bolster hiring and an agreement to hold off on job-killing legislation. (Gary Andres highlights a useful model for economic revival: the state of Texas.) But in fact, the administration is going in the opposition direction. That — and another dopey jobs summit — are surefire signs that the administration is a long way from getting its act together.

The “jobs summit” today typifies the root of the Obama team’s misguided thinking on jobs. In place of policies that would aid in private-sector job creation, the administration has provided an oversold and ineffective stimulus plan, lots of dog-and-pony shows, much heated rhetoric about Wall Street excesses, and a grab bag of policies that makes things worse. For starters, the looming debt, as Robert Samuelson explains, has created ”the perception that the administration will tolerate, despite rhetoric to the contrary, permanently large deficits [that] could ultimately rattle investors and lead to large, self-defeating increases in interest rates. There are risks in overaggressive government job-creation programs that can be sustained only by borrowing or taxes.” But that’s not all, as Samuelson observes:

Obama can’t be fairly blamed for most job losses, which stemmed from a crisis predating his election. But he has made a bad situation somewhat worse. His unwillingness to advance trade agreements (notably, with Colombia and South Korea) has hurt exports. The hostility to oil and gas drilling penalizes one source of domestic investment spending. More important, the decision to press controversial proposals (health care, climate change) was bound to increase uncertainty and undermine confidence. Some firms are postponing spending projects “until there is more clarity,” [Moody's Economy.com Mark] Zandi notes. Others are put off by anti-business rhetoric.

The jobs summit ignores all that and offers up yet another campaign-type event in lieu of productive governance. This is at the heart of not only the jobs problem but also much of what ails the administration. Rather than a useless summit, the administration would do well to consider a package of tax cuts designed to bolster hiring and an agreement to hold off on job-killing legislation. (Gary Andres highlights a useful model for economic revival: the state of Texas.) But in fact, the administration is going in the opposition direction. That — and another dopey jobs summit — are surefire signs that the administration is a long way from getting its act together.

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